Modern Capitalism

Introduction

Recently, during a dinner conversation, my father mentioned receiving numerous unsolicited phone calls from banks inviting him to invest.

• I immediately responded that if the world truly offered free money without any work and risk, it would likely be a scam disguised as an investment opportunity, primarily designed to benefit the salesperson.

Historically, banks have been trusted institutions where individuals could safely deposit their savings and earn interest.

• However, in recent years, many banks have increasingly adopted aggressive marketing tactics.
• For example, after making significant credit card purchases, I frequently receive offers for high-interest loans to repay the debt over several months (e.g. interest rate as high as 7.99% per annum).
• These practices suggested that some banks have adopted a predatory lending approach, reminiscent of loan sharks, preying on the financial struggles of consumers.
• This trend is particularly concerning given the rising cost of living and the growing number of people who rely on credit to make ends meet, deviating from the traditional principle of spending within one's means.

The Monopoly of Capitalism

Even before the widespread adoption of artificial intelligence, humans have been enslaved by capitalism.

• Initially, many innovative products were introduced to address unmet needs or solve existing problems.
• For instance, social media platforms like Facebook, ride-sharing services like Uber, food delivery apps like Food Panda, and streaming services like Netflix offered convenience and affordability.
• These products often gained traction by offering low prices or attractive discounts to attract a large user base.

However, a sinister plan often lurks behind this initial generosity.

• Once a critical mass of users is established, companies introduce premium plans with various tiers to recoup the initial investment.
• Subscription models, with their predictable and recurring revenue streams, have become highly attractive to investors.
• Unfortunately, some companies prioritize profit maximization over user experience, resulting in substandard services or the charging of fees for features that were previously free.

When consumers attempt to cancel these subscriptions, they may encounter deliberately complex processes or be enticed to remain subscription through enticing discount offers.

• These tactics can trap individuals in a cycle of recurring payments, making it difficult to break free from the grip of these services.

Sacrificing Quality for Profit

Another significant trend in the current market is the fierce price war prevalent in e-commerce.

• Lower prices and frequent discount promotions have become powerful drivers of consumer purchasing behaviour.
• To survive in this competitive environment, businesses are forced to reduce their profit margin with each sale, ultimately leading them to cut corners on product quality to maintain competitiveness.
• This can manifest in various ways, such as inadequate quality control, the exploitation of workers, and the use of inferior raw materials.

Instead of focusing on continuous improvement in product quality and innovation, the emphasis shifts towards producing usable but low-quality products with shorter lifespans.

• Many products, including mobile phones, downlights, and automobiles, are designed with planned obsolescence in mind, ensuring a steady stream of consumer purchases for businesses.
• This practice not only undermines long-term sustainability, but also discourages genuine innovation.

The Chinese proverb '一分钱一分货', which translates to "you get what you pay for", remains relevant in this context.

• While it is tempting to assume that branded products are inherently superior solely due to their brand name, they often maintain certain quality standards to ensure their long-term success.
• These brands prioritize sustainability and continued business operations, rather than solely focusing on short-term profits and a rapid exit from the market.

Summary

While we may feel powerless to significantly alter the course of the world, it is crucial to prioritize kindness and empathy towards others, rather than succumbing to selfishness and self-centeredness.

• The pursuit of personal gain should never overshadow our moral obligations.

By understanding the evolving nature of capitalism and the tactics employed by corporations, we can make more informed financial decisions and actively advocate for ethical business practices.